Michigan Tipped Workers’ Wage Hike Sparks Debate as Restaurants Brace for Impact

FARMINGTON, Mich. — Michigan‘s tipped workers are set to receive a minimum wage increase to $5.99 per hour starting Feb. 21, following a Michigan Supreme Court decision that reinstated a 2018 law. While advocates celebrate the change, restaurant owners warn of potential closures and rising costs for customers.

Greg Cowley, owner of John Cowley & Sons Irish Pub in Farmington, has implemented a 20% service charge to offset the wage hike. “This business model cannot support what they’re trying to do,” Cowley said. “It will put a lot of restaurants down.” Cowley chose the service charge over layoffs, emphasizing the need to retain his 16 servers to keep the business running.

The wage increase stems from a 2018 petition drive that sought to raise the tipped wage and expand paid sick leave. Republicans initially blocked the measure, but the Supreme Court’s ruling last summer cleared the way for its implementation. Advocacy group One Fair Wage argues the change will benefit workers. “The tips aren’t going away on Feb. 22. This is about raising the base wage with tips on top,” said Dave Woodward, a senior adviser for the group.

However, Republican Rep. Bill Schuette, chair of the House select committee Protecting Michigan Employees and Small Businesses, is working to prevent the wage hike. “Unless the Legislature acts, we’re going to see an elimination of the tip credit,” Schuette said. “This will not only put additional costs on families but also rob restaurant workers of their hard-earned tipped wages.”

Restaurant owners like Cowley fear the wage increase will force them to raise prices or close their doors. Meanwhile, workers and advocates argue the change is long overdue. “Every restaurant worker across Michigan will earn more money come Feb. 21,” Woodward said.

The debate extends beyond wages, as the 2018 law also mandates paid sick leave for Michigan workers. House Republicans are pushing legislation to exempt businesses with fewer than 50 employees from the requirement, citing concerns about operational challenges. Brian Calley, president of the Small Business Association of Michigan, said the mandate could strain small businesses. “Business owners — I’ve never seen them so frustrated and scared of the impacts of this,” Calley said.

As the Feb. 21 deadline approaches, the fate of Michigan’s tipped wage and sick leave policies remains uncertain. While House Republicans aim to revise the laws, Senate Democrats have proposed alternative legislation to preserve the wage increase and sick leave provisions. The outcome will have significant implications for Michigan’s workforce and small businesses.